Some of Europe’s largest asset managers have fired their latest warning against the proposed financial transaction tax, ahead of a crunch meeting of French and German officials today.

A letter sent by a group of 14 asset management firms and pension funds to ministers of finance in the 11 countries backing the tax, the Council of the European Union, the European Parliament and the European Commission, reiterates the view that the FTT will ultimately hit citizens’ savings and the real economy.

The letter has been deliberately timed to coincide with a meeting of politicians from France and Germany – seen as two of the biggest supporters of the FTT – today. Many expect the high-level representation from the French and German finance ministers at the meeting to give a fresh impetus for moving ahead with the FTT.

It also follows a letter sent on February 11 by the Group of the Progressive Alliance of Socialists & Democrats in the European Parliament to Pierre Moscovici and Wolfgang Schäuble, finance minister for France and Germany respectively, urging them to implement a broad FTT as soon as possible.

The latest letter from buyside institutions, dated February 13 and seen by Financial News, calls for the “complete withdrawal of the current FTT proposal”. It added: “There is a widespread misapprehension that the FTT will be a tax on financial services. It will not be – it will be a tax on citizens’ savings and eventual retirement incomes.”

According to the firms, the introduction of a FTT would erode the investment performance of Europe’s savers and pension funds, reduce the cash management and hedging capabilities of corporate firms, reduce liquidity in European capital markets and undermine the single market in Europe.

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Eleven countries – Austria, Belgium, Estonia, France, Germany, Italy, Greece, Portugal, Slovakia, Slovenia, and Spain – are currently supporting plans for a FTT, which would place a small charge on trades in financial instruments. But the countries, which are working under the "enhanced cooperation" framework for creating EU laws, have been forced to revisit an initial proposal made just over a year ago due to a number of concerns, most notably the broad reach of the tax.

The European Commission, European Parliament and Council of the European Union did not respond to a request for comment in time for publication.

-- write to apuaar@efinancialnews.com and mfoster@efinancialnews.com; follow on Twitter: @anishpuaar